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One way to fight a coronavirus recession: $1k for every American

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Re: One way to fight a coronavirus recession: $1k for every American

#131

Post by adrianmonk »

tjr225 wrote: post #3

Am I way out of band or does that seem like a comically small amount of money for the average American? I live in an extremely low COL area and live well within my current means. Assuming my work dries up and I don't have any savings, 3k$ would buy me two months tops. Just to give you an idea of how cheaply I live: Mortgage is ~800$/mo, Car is a paid off 2006 Toyota Highlander, Student loan minimums of ~400$/mo, My w…

I don't think the intent is to make everything go smoothly for the average American. Instead, it's to keep the gears of the economy turning.

People who have money saved will just dip into their savings and keep spending. At a reduced rate, but not at a rate that falls off a cliff.

But people who live paycheck to paycheck will just stop spending. Because they can't spend. And the money they didn't spend means reduced cash flow for someone else. Which means that other person (or business) won't spend.

In many cases, it will be a huge domino effect. Enough people take the paycheck-to-paycheck approach that there are essentially large numbers of people who have been moving synchronously, in lock step with each other. If one stops moving (spending), they all stop.

If spending stops, that means economic activity stops. Which is close to saying the same thing as saying recession.

Putting cash into people's hands counteracts this. The people who operate paycheck-to-paycheck are the main problem area that needs to be addressed to achieve the goal of keeping the gears turning. And when they receive $1K, they will spend every cent immediately, which is exactly what you need them to do. (People with savings aren't the main problem area, but they will also spend some of it.)

Economically, this is going to be very ugly for a lot of people, but putting $1K into people's hands could make it a lot less ugly compared to the alternative of not doing it, and I think that's all this is aiming for.

Re: One way to fight a coronavirus recession: $1k for every American

#133

Post by tnel77 »

tjr225 wrote: post #3

Am I way out of band or does that seem like a comically small amount of money for the average American? I live in an extremely low COL area and live well within my current means. Assuming my work dries up and I don't have any savings, 3k$ would buy me two months tops. Just to give you an idea of how cheaply I live: Mortgage is ~800$/mo, Car is a paid off 2006 Toyota Highlander, Student loan minimums of ~400$/mo, My w…

I believe that that is the point of UBI. It’s a huge benefit for almost every American, but it’s not enough to live on as that’s the point. It allows you to pay for the things you need and maybe go out a bit to help stimulate the economy, but you couldn’t just be a “free loader.” You’d still need to work. In the current pandemic that obviously presents some challenges, but it’s better than nothing.

Re: One way to fight a coronavirus recession: $1k for every American

#134

Post by beatgammit »

andreilys wrote: post #23
Gunax wrote: post #15

I too think this is silly. Everyone wants to use this disaster to achieve the policy goals they wanted anyway. Republicans want to use it as an excuse for tax cuts. Democrats want to expand public healthcare and benefits. Everyone is trying to attach riders for domestic violence victims or pork spending or whatever pet issue they have. And now the Ubi folks want this. Nothing changes. Same BS.

What do you think will help the recovery more, QE by central banks or UBI?

Neither? Markets have been overheated, so a correction makes a ton of sense.

What we need is to get over this pandemic as quickly as possible so we can stop disrupting trade and get people back to work. The news coming out of China is encouraging, and production seems to be slowly returning to normal.

Any discussion about UBI should be based on the long term merits, not a reaction to any current crisis. QE is a bit different, but honestly I think it does more harm than good much of the time, especially once it makes it through the political system.

Re: One way to fight a coronavirus recession: $1k for every American

#135

Post by timwaagh »

They tried that in Iran. The result: massive inflation. The system cannot handle such a massive spike in demand especially if production is under strain from covid. It surprises me Romney is for it because he was a politician back when ahmedinejad tried that little stunt.

Re: One way to fight a coronavirus recession: $1k for every American

#136

Post by selfishgene »

I like how Mankiew nonchalantly remarks that $1000 "sounds about right."

Wonder if he consulted any of the models in his widely used Macroeconomics textbook in order to reach this profound conclusion.

I think an even better way to help people right now would include Congress putting an end to the price gouging of students who are forced to pay as much as $200 dollars a pop to purchase textbooks (like Mankiew's Macroeconomics) for their classes.

And there's an idea for Bernie Sanders too, who is gasping for breath on the campaign trail now: instead of promising "free tuition" handouts, how about asking government to play a role in establishing "fair tuition" (much like Medicare already does in health care for seniors) that reflects the true costs of educating students (using the latest technologies) in subjects that lead to real jobs, after universities have been forced to cut the fat (starting from the top!) out of their bloated university administrations.

Re: One way to fight a coronavirus recession: $1k for every American

#138

Post by LordOfWolves »

selfishgene wrote: post #136

I like how Mankiew nonchalantly remarks that $1000 "sounds about right." Wonder if he consulted any of the models in his widely used Macroeconomics textbook in order to reach this profound conclusion. I think an even better way to help people right now would include Congress putting an end to the price gouging of students who are forced to pay as much as $200 dollars a pop to purchase textbooks (like Mankiew's Macroe…

Unfortunately, price regulations on textbooks (however possible) would only affect the individuals "consuming" those textbooks, the majority of which are traditional students.

This has been a problem for many years. Why the price of a textbook for a particular course are not paid for via the cost(s) of that particular course is beyond me. I am all for solving this problem, but it is one of many.

Re: One way to fight a coronavirus recession: $1k for every American

#139

Post by vb6sp6 »

tjr225 wrote: post #3

Am I way out of band or does that seem like a comically small amount of money for the average American? I live in an extremely low COL area and live well within my current means. Assuming my work dries up and I don't have any savings, 3k$ would buy me two months tops. Just to give you an idea of how cheaply I live: Mortgage is ~800$/mo, Car is a paid off 2006 Toyota Highlander, Student loan minimums of ~400$/mo, My w…

It's a way to prevent revolts from starvation, not to maintain your current living standards.

Re: One way to fight a coronavirus recession: $1k for every American

#140

Post by jkingsbery »

zbyte64 wrote: post #117

Or we could provide universal healthcare, but that would be crazy.

As we are all being reminded now, healthcare is a good with a fixed capacity. We still need some way to decide who gets access to the capacity.

But even if we did provide universal healthcare, people who aren't working run the risk of losing their homes, access to food, and other necessities, so providing universal healthcare would only solve part of the problem that's being proposed.

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